EU supports over EUR 200m for businesses in Bavaria following EIF and LfA agreements

The EIF and LfA Förderbank Bayern (LfA) have signed a COSME loan guarantee agreement and a joint equity initiative extension agreement with funding from the European Union to support Small and Medium-sized Enterprises (SMEs) in Germany. The COSME agreement with LfA will provide risk-sharing to on-lending banks allowing them to substantially increase loan volumes to SMEs with limited collateral, including start-ups, and will help to generate a new portfolio of loans worth up to EUR 150m over the next 3 years. Over 1,200 companies are expected to benefit from this transaction.

The EIF also signed a EUR 50m extension of the LfA-EIF equity facility which will increase from EUR 100.0m to EUR 150m. The LfA-EIF facility is a fund-of-funds which invests in venture capital funds and co-invests with selected business angels in Bavaria under the European Angels Fund Germany. The LfA-EIF equity facility covers all technology areas (ICT, life sciences, energy-related, emerging and converging technologies) and EIF manages the facility on behalf of the LfA Förderbank Bayern (LfA).

Speaking at the signature ceremony in Munich, EIF Secretary General Maria Leander, said: “I am delighted to be signing the first COSME agreement in Germany and an extension of the joint equity facility. LfA is one of EIF’s long-term partners and I am confident that they will ensure that these new agreements benefit SMEs and contribute to stimulating growth and innovation in Bavaria”.

LfA Chairman Dr. Otto Beierl commented: “We are very pleased to extend the cooperation with the EIF and are absolutely positive about the further success. This broad collaboration provides new european means for start-ups in technology areas as well as for Small and Medium-sized Enterprises in Bavaria.”

About the EIF

The European Investment Fund's (EIF) central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. EIF’s total net commitments to private equity funds amounted to over EUR 7.9bn at end 2013. With investments in over 435 funds, EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. EIF’s guarantees loan portfolio totalled over EUR 5.6bn in over 300 operations at end 2013, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

About LfA

The LfA Förderbank Bayern, established in 1951, is the specialized state-owned development bank for the promotion of the economy in Bavaria in order to secure and create jobs. Therefore the LfA finances start-ups and small and medium-sized enterprises, focussing mainly on investments as well as technical innovations, environmental protection and financial restructuring. In addition the LfA is active in the field of infrastructure investments by municipalities. In cooperation with commercial banks the LfA offers financial services such as low interest loans and risk assumptions. The LfA also provides financial solutions in terms of equity capital through the affiliated BayBG Bayerische Beteiligungsgesellschaft mbH and Bayern Kapital GmbH. In 2014 the LfA granted loans with a volume of round about 2 billion Euros to approximately 5,500 Bavarian enterprises including about 1,000 cases in the start-up sector. SMEs wishing to apply for finance under the COSME programme can directly contact LfA under the following website: www.lfa.de

About COSME

COSME is the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (SMEs) running from 2014 to 2020. COSME (mobilises loans and equity investments to SMEs in Europe.

The COSME Loan Guarantee Facility (LGF) funds guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance mainly up to EUR 150,000 to SMEs. This facility also includes securitisation of SME debt finance portfolios. The COSME programme also invests through the COSME Equity Facility for Growth (EFG) in equity funds that provide risk capital to SMEs mainly in the expansion and growth stages. The COSME programme builds on the success of the Competitiveness and Innovation Framework Programme (2007-2013) which helped to mobilise more than EUR 18 billion of loans and EUR 3 billion of venture capital to over 350,000 SMEs in Europe. Businesses can contact selected financial institutions in their country to get access to EU financing: www.access2finance.eu

Press contact:

- EIF: David Yormesor, tel : +352 42 66 88 346, e-mail : d.yormesor(at)eif.org

- LfA: Florian Albert, tel. +49 89 2124 2226, e-mail: florian.albert(at)lfa.de